Albanian government reaps $8.6 billion from construction boom amid housing crisis – realestate.com.au

The Albanian government benefited from more than $8.6 billion last year from the country’s housing boom as the country struggled to meet crucial housing affordability targets.

According to new data from the Australian Bureau of Statistics, Australians will have spent a record $95.482 billion on construction costs in 2025 – with Victorians alone spending a whopping $29 billion of that amount.

But construction industry experts have called on the government to review their taxation of the housing sector, with up to $8.68 billion of the country’s unprecedented spending in 2025 going towards GST payments on what is an “essential item”.

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It may have cost the country thousands of new homes as it tries to claw its way out of the housing affordability crisis.

With homebuyers also incurring costs due to stamp duty, and their land costs likely to be inflated by land tax and other government-linked costs, the Housing Industry Association has said change is needed if the country is to meet its homebuilding targets.

Australia is almost into the second year of a five-year timeline aimed at establishing 1.2 million new homes across the country under the National Housing Agreement, led by the Albanian government.

It ended its first year with about 60,000 homes short of the 240,000 needed per year to reach the goal.

GST is being branded as a barrier to building homes in Australia, with the scope being that at least 8,600 could have been built with tax payments made last year.

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The latest ABS data shows Victoria has paid more than $29.3 billion in trade, material and associated construction cost payments for work on new homes, from apartments to houses.

Because most of that money would ultimately be paid by homebuyers, it would also mean they would receive the nation’s largest housing sales tax bill: an unprecedented $2.665 billion.

NSW was next with a spend of $27.432 billion, followed by Queensland, which surpassed the $20 billion mark for the first time in the state’s history.

South Australia and Perth both raised roughly an extra billion dollars from $6 billion and $9.44 billion respectively, while Tasmanians’ spending of $1.029 billion was slightly lower than a year ago.

Home buyers in most Australian states are financing billions of dollars in construction work and GST payments.

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The figures come from the latest version of ABS’s Construction Work Done data analysis, which covers construction activity on works over $10,000 and uses builder surveys to estimate costs paid.

GST calculations were done using the government’s Moneysmart calculator.

Tim Reardon, chief economist at the Housing Industry Association, said that assuming even $1 million for a houses and land package, an $8.68 billion GST bill could have built around 8,680 new homes nationally.

Alternatively, this could amount to more than 17,000 affordable housing units with a total cost of $500,000.

HIA chief economist Tim Reardon believes housing construction should not include GST costs. Photo: Tertius Pickard.

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“Housing is an essential item, just like food, and therefore VAT should not be included,” Mr Reardon said.

“And at least not until we have reached the target of 1.2 million homes.

“The quickest way to reduce the cost of developing new homes is to remove the cost of GST.”

Michael Dyer, senior economist at Oxford Economics, said that while some of the increase in housing spending over the past year would be related to “growth in costs on the labor side”, the construction of larger and better quality homes could also be a factor.

Mr Dyer pointed out that part of the increase for Queensland is due to the wave of $2 million apartments appearing in luxury developments on the Gold Coast.

The high-rise of new apartments on the Gold Coast and new-build complexes in Victoria is likely to have contributed to record housing spending by 2025.

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Victoria could also see an increase due to the highest prevalence of build-to-rent complexes in the country, with such buildings typically equipped to a fairly high standard.

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